Page 1 GAO-14-280R Defense In-Kind Projects

441 G St. N.W.

Washington, DC 20548

April 9, 2014

Congressional Committees

Defense Infrastructure: In-Kind Projects Initiated during Fiscal Years 2011 and 2012

The Department of Defense (DOD) has, for over 20 years, accepted from host nations and 

domestic third parties facilities constructed or renovated either as host-nation support, or in 

exchange for goods, services, real property, or an interest in real property that the department 

provides to third parties. DOD uses these in-kind construction or renovation projects as 

alternatives to using appropriated funds to help manage a global real-property portfolio with 

more than 555,000 facilities worldwide and with a replacement value of nearly $850 billion. The 

National Defense Authorization Act for Fiscal Year 2013 mandates GAO to report on the 

construction or renovation of DOD facilities with in-kind payments, covering in-kind projects 

begun during the preceding 2 years. To respond to this mandate, we examined the processes 

DOD used to select in-kind construction and renovation projects in Asia (Japan and the 

Republic of Korea) and domestically, and provided a listing of each facility constructed or 

renovated in-kind for DOD (including those in Germany), the value in U.S. dollars of that 

construction or renovation, the source of the in-kind project, the agreement pursuant to which 

the construction or renovation was performed, and a description of the purpose and need for the 

construction or renovation. Our review expands upon the preliminary information we provided to 

you on September 30, 2013, about overseas and domestic in-kind construction and renovation 

projects initiated during fiscal years 2011 and 2012.

For our review, we defined “in-kind construction and renovation projects” as those resulting from 

certain host-nation support programs or from transactions (whether domestic or overseas) in 

which DOD provides goods, services, real property, or an interest in real property (including, but 

not limited to, a leasehold or easement) in exchange for compensation, and in which any part of 

that compensation is provided in the form of construction or renovation services. This definition 

of “in-kind construction and renovation projects” is broader than the concept of in-kind

“payments” for residual value or received in lieu of cash compensation as part of a domestic 

agreement with a third party because the definition includes host-nation support for installation

facilities overseas. Voluntary contributions made by a host nation for the purpose of defraying 

costs to station, maintain, and train U.S. military forces in its country do not constitute a 

payment or obligate a host nation to make payments to the United States. Host-nation support 

provided in the form of direct construction rather than a cash contribution is viewed by DOD as 

one of three basic types of in-kind construction.

1

 1

DOD officials describe three basic types of in-kind construction: (1) host-nation support provided in the form of direct 

construction rather than a cash contribution (e.g., in Japan and the Republic of Korea), (2) construction provided by a 

host nation as compensation for the residual value of U.S.-funded improvements returned to that host nation (e.g., 

PIK in Germany), and (3) fair market value consideration for U.S. property leased to a person/entity provided in the 

form of direct construction rather than cash (as authorized by 10 U.S.C. § 2667) (e.g., domestic in-kind). Given these 

three types, DOD believes only the last two fit the accepted definition of in-kind payments. A payment is something 

one party provides to another party in response to receiving something. Therefore in DOD’s view, any international 

agreements in which a host nation agrees to voluntarily offset U.S. stationing costs should not be misconstrued as a 

“payment” because there is no quid pro quo exchange of like goods or services.

 We excluded from our definition of “in kind 
Page 2 GAO-14-280R Defense In-Kind Projects

construction or renovation projects” gifts, sustainment projects (e.g., regularly scheduled 

maintenance and inspections), and cash sales or rent used to finance construction or 

renovation. We defined “initiated” as that point at which the party responsible for completing the 

in-kind construction or renovation project received an official notice that allowed it to proceed 

with the project. For the purposes of this review we confirmed that knowledgeable officials in the 

Office of the Deputy Under Secretary of Defense for Installations and Environment agreed with 

our definitions.

To examine the processes DOD used to select in-kind projects in Asia and domestically, we 

identified and reviewed bilateral agreements with host nations and statutory authorities for 

domestic land use, along with guidance, policies, and relevant documents related to processes 

in place for selecting in-kind payment projects. We also interviewed officials at the Office of the 

Secretary of Defense, U.S. Pacific Command, U.S. Forces Korea, U.S. Forces Japan, and the 

military services. We did not review processes related to residual value payments for the return 

of facilities provided by the United States to the government of Germany because the processes 

for such compensation were recently reviewed by the DOD Inspector General and Congress.

2

For our second objective we compiled information and requested data on in-kind construction 

and renovation projects for fiscal years 2011 and 2012, their value in U.S. dollars, the source of 

the in-kind project, the agreement or statutory authority, and their purpose and need from DOD 

components—U.S. Pacific Command; U.S. European Command; the Departments of the Army, 

Navy (Marine Corps), and Air Force; and the TRICARE Management Activity.3

We conducted this performance audit from January 2013 to April 2014, in accordance with 

generally accepted government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our audit objectives. 

We conducted a 

data-reliability assessment of the data that each DOD component submitted by requesting that 

the component certify that the lists of projects provided to us were accurate and complete and 

that the component include all projects initiated during the specified dates. The Office of the 

Deputy Under Secretary of Defense for Installations and Environment also reviewed the data 

submitted by the components for consistency and to ensure that the data were for projects that 

we considered “in-kind projects.” We provided each component with an opportunity for a final 

review of the data we compiled. We found that the data provided were sufficiently reliable for the 

purposes of this assessment.

Background

Accepting infrastructure improvements through in-kind construction and renovation projects 

allows DOD to fulfill some of its requirements for infrastructure overseas and domestically 

without the use of appropriated funds. In Asia, in-kind construction and renovation projects are 

completed using host-nation resources provided through the host nation’s budget process.

Depending upon whether projects are initiated overseas or domestically, the selection of in-kind 

construction and renovation projects are subject to specific bilateral agreements and statutory 

 2

Committee on Armed Services, U.S. Senate, Inquiry Into U.S. Costs and Allied Contributions to Support the U.S. 

Military Presence Overseas, S. Rep. No. 113-12 (2013); and Department of Defense Inspector General, DOD Can 

Improve Its Accounting for Residual Value From the Sale of U.S. Facilities in Europe, DODIG-2012-082 (Alexandria, 

Va.: May 4, 2012). “Residual value” is the negotiated monetary or nonmonetary compensation that host nations 

provide to DOD following the return of DOD-funded facilities or other capital improvements to the host nation.

3

During this period all in-kind projects overseas were located in Japan, the Republic of Korea, and Germany.
Page 3 GAO-14-280R Defense In-Kind Projects

authorities. Bilateral agreements include efforts to relocate U.S. forces and consolidate 

infrastructure being used by DOD. There are also other agreements between the United States 

and host nations to defray some of the costs of stationing U.S. forces overseas, and to support 

installations that will continue to be used by the United States—known as enduring 

installations—through the use of host-nation resources. Real property and improvements to 

infrastructure contributed by host nations in Asia do not result in an obligation on the part of the 

host nation to provide residual value payments (as it does in Germany), and there is generally 

no obligation for the United States to return real property or facilities in their original condition. 

Domestically, the Departments of the Army, Navy, and Air Force have statutory authority to 

lease or issue an easement on underutilized real property under their control or jurisdiction in 

exchange for in-kind construction or renovation projects. See enclosure I for more-detailed 

information about the specific bilateral agreements and statutory authorities related to in-kind 

overseas and domestic construction and renovation projects.

Results in Brief

In summary, DOD’s processes for selecting in-kind projects in Asia vary by country and by 

whether the project is intended to support force-structure initiatives or enduring installations, 

although these efforts are not mutually exclusive; domestically, DOD’s processes for selecting 

in-kind projects vary by military service and by statutory authority. In Asia, the selection of inkind projects to support initiatives for the relocation of U.S. troops within Japan and the Republic 

of Korea generally results from a schedule-driven process based on resources and 

infrastructure made available by the host nation to fulfill initiatives agreed to in prior years with 

target dates for completion, and input from affected military bases. The selection of in-kind 

projects to support enduring installations is characterized by priority-based processes with input 

from installations and unit commanders. All in-kind projects to support U.S. forces in Asia are 

the result of host-nation support as agreed to bilaterally, with the exception of facilities provided 

through the Japan Facilities Improvement Program, which is a voluntary effort on the part of the 

government of Japan. All DOD facility planning and project selection at enduring locations is 

based on military and operational requirements, independent of location. When compared with 

the project-selection processes in Japan, DOD has more ability to prioritize and select projects 

in the Republic of Korea. Domestically, the services select projects based on military and 

operational need regardless of location, but the processes followed vary somewhat depending 

on the authorizing statute for the in-kind projects—for example, the authorities for enhanced-use 

leases, exchanges, or easements. For more-detailed information on the processes DOD uses to 

select in-kind projects in Asia and in the continental United States, see enclosure II. 

During fiscal years 2011 and 2012, DOD initiated 107 in-kind construction and renovation 

projects overseas (in Japan, the Republic of Korea, and Germany) and in the continental United 

States (see enc. III and enc. IV for listings—for overseas and domestic projects, respectively—

of each facility constructed or renovated for DOD as payment in-kind, the value in U.S. dollars of 

that construction or renovation, the source of the in-kind payment, the agreement pursuant to 

which the payment was made, and a description of the purpose and need for the construction or 

renovation). 

• In Asia, DOD initiated 68 construction and renovation projects, and DOD officials provided 

estimated values totaling about $1.3 billion for 44 of those projects. DOD initiated 38 in-kind 

projects in Japan, and DOD independent budget estimates for 14 of the 38 projects indicate 

that the projects are valued at $257 million; however, at the time of our study, there were no 

DOD planning estimates available for the remaining 24 projects. Under the bilateral 

agreements between the United States and Japan, Japan is not obligated to disclose the 
Page 4 GAO-14-280R Defense In-Kind Projects

value of these projects. DOD initiated 30 projects in the Republic of Korea, and DOD 

officials estimate that these projects were valued at about $1 billion. Most of the in-kind 

projects initiated in Japan and the Republic of Korea were for operations and training 

facilities and for housing and community facilities. The remaining projects were for utility and 

ground improvements and for maintenance and production, supply, administrative, and 

hospital and medical facilities. 

• In Germany, DOD initiated 3 in-kind projects and funded them with residual value payments 

from the government of Germany that DOD officials estimated were valued at about $11.3 

million. One project was for operation and training, and the other two projects were for 

housing and community facilities.

• Domestically, the military services—the Army, Navy, and Air Force—initiated 36 in-kind 

construction and renovation projects that, on the basis of service estimates, total $421.1 

million.4 Of the 36 in-kind projects, 1 project (totaling an estimated value of $334 million) 

went to the Army’s single housing and community project; 3 projects (totaling an estimated 

value of $73.4 million) went to construction or renovation projects involving operation and 

training; and 32 projects (totaling an estimated value of $13.7 million) went to real-property 

capitalization, utility and ground improvements, supply, real-property management, and 

facility-condition assessment.

5 Comparatively, the Air Force had the most in-kind projects for 

fiscal years 2011 and 2012 (24 projects) compared to the Army (5 projects) and Navy (7 

projects). Specifically, 20 of the Air Force’s 24 projects were for an easement granted to 

Florida’s Mid-Bay Bridge Authority (a state agency) worth an estimated value of about $7.8

million, in exchange for building a road connector on Air Force property. The 20 in-kind 

projects resulting from the easement primarily went towards operations and training, and 

made up about 83 percent of Air Force’s in-kind construction and renovation projects 

initiated during fiscal years 2011 and 2012.

Agency Comments and Our Evaluation

In commenting on a draft of this report, DOD stated that the report properly highlights how DOD 

uses in-kind construction from different sources to improve facilities and conserve appropriated 

funds. On the other hand, DOD was concerned that we did not clearly distinguish in-kind 

payments from in-kind construction provided by host nations under binding international 

agreements focused on cost sharing, and further stated that the vast majority of the projects 

identified in the draft report as paid for with “payments in-kind” are mischaracterized. As our 

report states, our definition of “in-kind construction and renovation projects” is broader than that 

stated in DOD’s letter because our definition includes host-nation support for installation 

facilities overseas. Specifically, any references in our report to “payments in-kind” were 

restricted to projects in the United States and Germany. Moreover, we confirmed our definition 

with officials from the Office of the Deputy Under Secretary of Defense for Installations and 

 4

The Marine Corps did not initiate any in-kind projects during fiscal years 2011 and 2012. 

5

Army Lodging Privatization is included in our sample for the purpose of completeness, but according to DOD 

officials, this program differs in significant ways from the other in-kind projects listed here. While the lodging and 

housing privatization programs result in private in-kind construction or renovation of facilities that, in some cases, 

continue to be owned by DOD and will be returned to DOD at the conclusion of the relevant lease term. According to 

DOD officials, the purpose of these programs is to construct or renovate facilities to rent to servicemembers, not to 

obtain construction or renovation services of DOD facilities in-kind. These officials also note that due to the length of 

the leases in question (a typical lease term is 50–75 years) the facilities in question will not return to the department 

until late in their useful lives, which underscores the fact that these agreements are not intended to obtain 

construction or renovation in-kind.
Page 5 GAO-14-280R Defense In-Kind Projects

Environment, who agreed with our use of the definition. Similarly, our report also states that the

Office of the Deputy Under Secretary of Defense for Installations and Environment reviewed the 

data submitted by the military components for consistency and to ensure that the data were for 

projects that we considered “in-kind projects.” Therefore, we believe we have appropriately

characterized these projects in our report. DOD’s comments are reprinted in enclosure V. DOD 

also provided technical comments, which we incorporated as appropriate.

- - - - - 

We are sending copies of this report to appropriate congressional committees and to the 

Secretary of Defense; the Secretaries of the Army, Navy, and Air Force; and the Director of the 

Office of Management and Budget. In addition, this report is available at no charge on the GAO 

website at http://www.gao.gov. 

If you or your staff have any questions concerning this report, please contact me at (202) 512-

4523 or leporeb@gao.gov. Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this report. GAO staff who made key contributions to 

this report were Mark Wielgoszynski, Assistant Director; Timothy Burke; Mae F. Jones; Hia 

Quach; John E. Trubey; Amie Steele; and Michael Willems. 

Brian J. Lepore, Director

Defense Capabilities and Management

Enclosures – 5 
Page 6 GAO-14-280R Defense In-Kind Projects

List of Committees

The Honorable Carl Levin 

Chairman 

The Honorable James M. Inhofe 

Ranking Member 

Committee on Armed Services 

United States Senate

The Honorable Tim Johnson

Chairman 

The Honorable Mark Kirk 

Ranking Member 

Subcommittee on Military Construction,

Veterans Affairs and Related Agencies

Committee on Appropriations 

United States Senate

The Honorable Howard P. McKeon 

Chairman 

The Honorable Adam Smith 

Ranking Member 

Committee on Armed Services 

House of Representatives

The Honorable John Culberson 

Chairman 

The Honorable Sanford D. Bishop, Jr. 

Ranking Member 

Subcommittee on Military Construction,

Veterans Affairs and Related Agencies

Committee on Appropriations

House of Representatives
Page 7 GAO-14-280R Defense In-Kind Projects

Enclosure I: Bilateral Agreements in Asia and Domestic Statutory Authorities Related to

In-Kind Construction and Renovation Projects 

Accepting infrastructure improvements through in-kind construction and renovation projects 

allows the Department of Defense (DOD) to fulfill some of its requirements for infrastructure 

overseas and domestically without the use of appropriated funds. Depending upon whether the 

projects are initiated overseas or domestically, the selection of in-kind construction and 

renovation projects are subject to specific bilateral agreements and statutory authorities. In Asia, 

in-kind construction and renovation projects are completed using host-nation resources 

provided through the host nation’s budget process, but planning and selecting projects at 

enduring locations overseas can be complicated by international agreements, host-nation 

budgets, and local politics. Domestically, the Departments of the Army, Navy, and Air Force 

have statutory authority to, among other things, lease or issue an easement on underutilized 

real property under their control or jurisdiction in exchange for in-kind construction or renovation 

projects.

In Asia, In-Kind Construction and Renovation Projects Are Subject to Bilateral 

Agreements

In Asia, DOD has embarked on the largest transformation of U.S. military posture in the Pacific 

region since the end of World War II, a transformation that requires the construction of hundreds 

of new facilities and more than 3,500 housing units.6 Billions of dollars in combined investments 

by host nations and the U.S. government have already been identified as necessary to 

implement these initiatives. Bilateral agreements include efforts to relocate U.S. forces and 

consolidate infrastructure being used by DOD and specify the amount to be contributed by the 

host nation and the United States to implement force-structure initiatives, or state which costs 

will be borne by the United States and which by the host nation. Much of the construction and 

renovation necessary for these initiatives is the result of in-kind projects contributed by the host 

nation. There are also other agreements between the United States and host nations to defray 

some of the costs of stationing U.S. forces overseas and to support installations that will 

continue to be used by the United States—known as enduring installations—through the use of 

host-nation resources. Real property and improvements to infrastructure contributed by host 

nations in Asia are not the result of an obligation to provide residual value payments in 

exchange for real property returned to the host nation; rather they are voluntary contributions to 

the support of the U.S. presence in that host nation. DOD recognizes the unique character of 

construction programs funded by host nations in the U.S. Pacific Command area of 

responsibility and addresses their management separately from other military construction 

programs. Additional guidance has also been provided by the Chairman of the Joint Chiefs of 

Staff; the Commander, U.S. Pacific Command; and the commanders of U.S. forces in Japan 

and Korea. U.S. agreements and associated programs with Japan and the Republic of Korea 

that may result in in-kind construction and renovation projects are presented in table 1.

 

6

For more information, see GAO, Defense Management: Comprehensive Cost Information and Analysis of 

Alternatives Needed to Assess Military Posture in Asia, GAO-11-316 (Washington, D.C.: May 25, 2011); and Defense 

Management: More Reliable Cost Estimates and Further Planning Needed to Inform the Marine Corps Realignment 

Initiatives in the Pacific, GAO-13-360 (Washington, D.C.: June 11, 2013). 
Page 8 GAO-14-280R Defense In-Kind Projects

Table 1: Bilateral Agreements That May Result in In-Kind Construction and Renovation Projects

Host nation Agreement or 

program 

Description

Japana Special Action 

Committee on 

Okinawab

Formed to reduce the effect of the U.S. military presence on the

people of Okinawa, Japan, and strengthen the U.S.-Japan alliance.

Defense Posture 

Review Initiativec Relocates military units to reduce the burden of the U.S. military 

presence on Japanese communities while maintaining a continuing 

presence of U.S. forces in the region. 

Japan Facilities 

Improvement

Programd

A government of Japan initiative, which started in 1979, to ease the 

financial burden of stationing U.S. Forces in Japan. 

Koreae Yongsan 

Relocation Planf Relocates U.S. Forces Korea Headquarters from current locations in Seoul to locations further south, primarily to the Pyeongtaek region.

Land Partnership 

Plang Consolidates and relocates U.S. Forces Korea forces located north of the Han River to locations south of Seoul, primarily to the Pyeongtaek 

region.

Republic of Korea–

Funded 

Constructionh

Can be used to provide new or replacement facilities to support the 

joint defense of the Republic of Korea.

Logistics Cost 

Sharingh Provides resources that can be used for sustaining facilities or 

conducting restoration and modernization activities.

Source: GAO analysis of DOD information.

a

All projects in Japan are accepted as part of the Agreement between the United States of America and Japan Concerning New 

Special Measures Relating to Article XXIV of the Agreement Under Article VI of the Treaty of Mutual Cooperation and Security 

between the United States of America and Japan, Regarding Facilities and Areas and the Status of United States Armed Forces in 

Japan (Apr. 1, 2011).

b

See Special Action Committee on Okinawa, SACO Final Report (Dec. 2, 1996). The Special Action Committee on Okinawa was

established in November 1995 by the Governments of Japan and the United States.

c

See U.S.–Japan Security Consultative Committee Document, United States–Japan Roadmap for Realignment Implementation 

(May 1, 2006), which finalized key implementation details of the proposed realignment of U.S. Forces in Japan.

d See U.S.–Japan Security Consultative Committee Document, Host Nation Support (June 21, 2011). This document indicated that 

Facilities Improvement Program funding in the current Special Measures Agreement period will be no less than 20.6 billion yen per 

year.

e

Republic of Korea–Funded Construction and Logistics Cost Sharing projects in the Republic of Korea are subject to the Agreement

Between the United States of America and the Republic of Korea Concerning Special Measures Relating to Article V of the 

Agreement Under Article IV of the Mutual Defense Treaty Between The Republic of Korea and the United States of America 

Regarding Facilities and Areas and the Status of United States Armed Forces in the Republic of Korea (Jan. 15, 2009).

f

See Memorandum of Agreement between the Government of the Republic of Korea and the Government of the United States of 

America Regarding the Agreed Recommendation for Implementation of the Agreement between the Republic of Korea and the 

United States of America on the Relocation of United States Forces from the Seoul Metropolitan Area (Oct. 26, 2004).

g

See Agreement between the United States of America and the Republic of Korea amending the agreement between the United 

States of America and the Republic of Korea for the Land Partnership Plan of March 29, 2002 (Oct. 26, 2004).

h

See Implementation Arrangement For Special Measures Agreement (Mar. 24, 2009).

In Japan, the Defense Policy Review Initiative and the Special Action Committee on Okinawa 

involve construction projects to relocate and consolidate U.S. forces. In 2005 and 2006 the 

United States–Japan Defense Policy Review Initiative outlined the effort to relocate American 

military units in Japan to other areas to reduce the burden of the U.S. military presence on 

Japanese communities while maintaining a continuing presence of U.S. forces in the region. 
Page 9 GAO-14-280R Defense In-Kind Projects

The Defense Policy Review Initiative was preceded by the Special Action Committee on 

Okinawa. The United States and Japan released the Final Report of the Special Action 

Committee on Okinawa on December 2, 1996, which made 27 recommendations to reduce the 

effect of the U.S. military presence on the people of Okinawa, including building a replacement 

facility for Marine Corps Air Station Futenma elsewhere on Okinawa. In addition, the 

government of Japan constructs facilities for U.S. forces through the Japan Facilities 

Improvement Program to defray U.S. construction costs. According to DOD officials, this 

program is on a voluntary basis, and also minimizes the impacts of base operations on local 

communities, and has been used to support enduring installations and reduce U.S. sustainment 

costs.

In the Republic of Korea, two DOD posture initiatives, known as the Yongsan Relocation Plan 

and the Land Partnership Plan, will relocate and consolidate defense infrastructure used by the 

United States. The Yongsan Relocation Plan agreed to between the governments of the United 

States and the Republic of Korea in October 2004 primarily involves the relocation the 

headquarters for the U.S. 8th Army, U.S. Forces–Korea, Combined Forces Command, and the 

United Nations Command from U.S. Army Garrison Yongsan, an installation located in Seoul, to 

U.S. Army Garrison Humphreys (Camp Humphreys) in the Pyeongtaek area. The Land 

Partnership Plan realignment, agreed to by the United States and the Republic of Korea in 

March 2002, will primarily move U.S. troops currently stationed north of Seoul farther south to 

Camp Humphreys. The cost of stationing U.S. troops in the Republic of Korea is also defrayed 

by the Republic of Korea–Funded Construction Program, which provides in-kind construction 

and renovation projects (but can also be used to support force-structure initiatives such as the 

Land Partnership Plan) and the Logistics Cost Sharing program, which ordinarily provides 

maintenance and repairs, but may be used for in-kind renovation projects. 

Domestic In-Kind Construction and Renovation Projects Are Subject to Title 10 of the 

U.S. Code

The Departments of the Army, Navy, and Air Force have statutory authority under sections 

2667, 2668, and 18240 of Title 10 of the United States Code to lease or issue an easement on 

underutilized real property under their control or jurisdiction in exchange for in-kind construction 

or renovation projects. Section 2667 provides authority to the Secretaries of the military 

departments to lease nonexcess real property under the control of the respective departments, 

subject to several provisions. Concerning consideration received in exchange for these leases, 

section 2667 provides that if the consideration is to be cash, then the cash payments must be 

deposited into a special account in the U.S. Treasury and may only be used in such amounts as 

provided in appropriations acts, but that at least 50 percent of that consideration will only be 

available for use at the installation where the leased property is located. If the consideration is 

in-kind, section 2667 provides examples of acceptable forms of in-kind consideration, which

include the restoration of property or facilities and the construction of new facilities. Section 

2668 allows the Secretaries of the military departments to grant easements to allow another 

person or organization to legally use property for a specified purpose provided that doing so 

would not be against the public interest, which according to officials might include uses that do 

not unreasonably interfere with the overall operation of the installation or impair the security of 

the installation. Easements can be granted to, among other things, provide rights-of-way for 

railroad tracks, gas/water/sewer/oil pipe lines, substations for electric power transmission lines, 

canals, ditches, flumes, tunnels, roads and streets, and poles and lines for the transmission or 

distribution of communications signals. Section 18240 of Title 10 allows DOD to acquire a 

facility, or addition to an existing facility, needed to satisfy military requirements for a reserve 

component through an exchange. A brief summary of these authorities is provided in table 2. 
Page 10 GAO-14-280R Defense In-Kind Projects

Table 2: Statutory Authorities Governing Domestic Construction and Renovation Projects Using In-Kind 

Payments

Statutory authority Description of statutory authority

10 U.S.C. § 2667 Provides authority to Secretaries of the military departments to lease nonexcess real 

property under the control of the respective departments, subject to several provisions.

10 U.S.C. § 2668 Provides authority to Secretaries of the military departments for easements for rights-of 

way over, in, and upon public lands permanently withdrawn or reserved for the use of that 

department that will not be against the public interest.

10 U.S.C. § 18240 Provides authority to Secretaries of the military departments to acquire a facility, or 

addition to an existing facility, needed to satisfy military requirements for a reserve 

component by carrying out an exchange of an existing facility through an agreement with 

an executive agency, the United States Postal Service, or a state, local government, local 

authority, or private entity.

Source: U.S. Code.

Section 2667 of Title 10 of the United States Code Provides Military Secretaries with Authority 

to Lease Nonexcess Real Property

Section 2667 of Title 10 provides authority to Secretaries of the military departments to lease 

nonexcess real property under the control of the respective departments, subject to several 

provisions. For example, such leases must be considered by the respective Secretary to be 

advantageous to the United States and be on terms that the respective Secretary considers will 

promote the national defense or be in the public interest. In addition, each lease, among other 

things, (1) may not be for more than 5 years, unless the Secretary concerned determines that a 

lease for a longer period will promote the national defense or be in the public interest; (2) shall 

permit the Secretary to revoke the lease at any time, unless the Secretary determines that the 

omission of such a provision will promote the national defense or be in the public interest; (3) 

shall provide for the payment (in cash or in-kind) by the lessee of consideration in an amount 

that is not less than the fair market value of the lease interest, as determined by the Secretary. 

Concerning lease consideration, section 2667 provides that if the consideration is to be cash, 

then the cash payments must be deposited into a special account in the U.S. Treasury and may 

only be used in such amounts as provided in appropriations acts. Also, once these amounts are 

appropriated, section 2667 provides that at least 50 percent of the lease proceeds are only 

available for use at the installation where the leased property is located, and that the 

appropriated funds may be used for specific enumerated purposes relating to real-property 

construction, maintenance services, lease of facilities, or payment of utility services. In the event 

that consideration for the lease is to be in-kind, then section 2667 provides a list of acceptable 

forms of in-kind consideration that includes the maintenance, protection, alteration, repair, 

improvement, or restoration of property or facilities; the construction of new facilities; and the 

provision of facilities, utility services, or real-property maintenance services.

Although the authorizing statute, section 2667, does not use “enhanced-use lease” to 

differentiate leases executed pursuant to this authority, the services generally distinguish an 

enhanced-use lease from a normal out-lease on the basis of scope, process, term, and 

consideration. For example, an enhanced-use lease might provide for a 50-year lease of military 

land to a private developer that would be expected to construct office or other commercial 

buildings on the land and then rent the facilities to private-sector tenants for profit. As 
Page 11 GAO-14-280R Defense In-Kind Projects

consideration, the military might receive cash or in-kind services valued at an amount equal to

the fair market value of the lease.

Section 2668 of Title 10 of the United States Code Provides Military Secretaries with Authority 

to Lease Easements for Rights-of-Way

Under section 2668 of Title 10 of the United States Code, the military Secretaries have the 

authority to receive in-kind consideration in exchange for easements of rights-of-way over, in, 

and upon public lands that the Secretary determines will not be against the public interest. In the 

case of this statutory authority, the Secretaries of the military departments may grant other 

persons or organizations the legal right to use public land for a specified purpose. Uses for 

which an easement can be granted include, among other things, railroad tracks, 

gas/water/sewer/oil pipe lines, substations for electric power transmission lines, canals, ditches, 

flumes, tunnels, roads and streets, and poles and lines for the transmission or distribution of 

communications signals. 

Section 18240 of Title 10 of the United States Code Provides Military Secretaries with Authority 

to Acquire a Facility or Addition to an Existing Facility

Section 18240 of Title 10 of the United States Code indicates that the Secretary of Defense may 

authorize the Secretary of a military department to acquire a facility, or addition to an existing 

facility, needed to satisfy military requirements for a reserve component by carrying out an 

exchange of an existing facility under the control of that Secretary through an agreement with an 

executive agency, the United States Postal Service, or a state, local government, local authority, 

or private entity. The acquisition of a facility or an addition to an existing facility may include the 

acquisition of utilities, equipment, and furnishings for the facility. In any exchange carried out 

using this authority, the value of the replacement facility, or addition to an existing facility, 

including any utilities, equipment, and furnishings, that is acquired by the United States shall be 

at least equal to the fair market value of the facility conveyed by the United States under the 

agreement. If the values are unequal, the values may not be equalized by any payment of cash 

consideration by either party to the agreement. Such an unequal exchange can only go forward 

when the value of the facility received by the government is greater than the fair market value of 

the facility the government is conveying, because the statute provides that exchanges may only 

be made when the value of the facility the government receives is at least equal to the fair 

market value of the facility the government is giving up.
Page 12 GAO-14-280R Defense In-Kind Projects

Enclosure II: DOD’s Processes for Selecting In-Kind Projects in Asia and Domestically 

during Fiscal Years 2011 and 2012. 

DOD’s processes for selecting in-kind projects in Asia vary by country and by whether the 

project is intended to support force-structure initiatives or enduring installations; domestically,

DOD’s processes for selecting in-kind projects vary by military service and by statutory 

authority. In Asia, the selection of in-kind projects to support initiatives for the relocation of U.S.

troops within Japan and the Republic of Korea generally results from a schedule-driven process 

based on resources and infrastructure made available by the host nation to fulfill initiatives 

agreed to in prior years with target dates for completion, and input from affected military bases. 

The selection of in-kind projects to support enduring installations in Asia is characterized by 

priority-based processes with input from installations and unit commanders. All in-kind projects 

to support U.S. forces in Asia in our scope are the result of host-nation support as agreed to 

bilaterally, with the exception of facilities provided through the Japan Facilities Improvement 

Program, which is a voluntary effort on the part of the government of Japan. When compared 

with the project-selection processes in Japan, DOD has more flexibility to select in-kind projects 

in the Republic of Korea. Domestically, the services select projects based on military and 

operational need regardless of location, but the processes followed vary somewhat depending 

on the authorizing statute for in-kind projects—for example, enhanced-use leases, exchanges, 

or easements. 

DOD’s Overseas Processes for Selecting In-Kind Projects in Asia Vary by Country and by 

Whether the Project Is to Support Force-Structure Initiatives or Enduring Installations

Irrespective of whether a project is in Japan or the Republic of Korea, or whether a project is 

intended to support force-structure initiatives or enduring installations, the process for selecting 

it ultimately involves a confluence between input from host country and DOD entities. In figures 

1 and 2, we provide a general depiction of the processes used in Japan and the Republic of 

Korea, respectively, to select in-kind projects.
Page 13 GAO-14-280R Defense In-Kind Projects

Figure 1: General Depiction of Processes Used in Japan to Select In-Kind Projects

a DOD components include U.S. Pacific Command, U.S. Joint Chiefs of Staff/Engineer, and Deputy Under Secretary of Defense 

(Installations and Environment).
Page 14 GAO-14-280R Defense In-Kind Projects

Figure 2: General Depiction of Processes in the Republic of Korea Used to Select In-Kind Projects

a

DOD components include U.S. Pacific Command, U.S. Joint Chiefs of Staff/Engineer, and Deputy Under Secretary of Defense (Installations and Environment).

Selection of In-Kind Projects to Support Initiatives for the Relocation of U.S. Troops within 

Japan and the Republic of Korea Generally Results from a Schedule-Driven Process 

Force-structure initiatives in Asia include the Defense Posture Review Initiative and the Special 

Action Committee on Okinawa in Japan, and the Yongsan Relocation Plan and the Land 

Partnership Plan in the Republic of Korea. To select projects for completing these initiatives the 

U.S. Pacific Command and Office of the Secretary of Defense review annual project lists to 

assure a logical progression towards completion. However, differences exist in the way projects 

related to these initiatives are selected in Japan and the Republic of Korea. For example, the 

Defense Posture Review Initiative for relocating and consolidating Infrastructure used by U.S. 

forces in Japan includes projects to replace facilities displaced by new construction. One such 

project using Defense Posture Review Initiative resources was to relocate an existing aircraft 

hangar at Marine Corps Air Station Iwakuni to a new location on the base in order to 

accommodate construction of military housing on the original site. After projects in Japan are 

selected, the United States provides design criteria and hands off projects to the government of 

Japan for design and construction with limited U.S. visibility into the cost of projects. There are 

differences in the way projects to support force-structure initiatives in the Republic of Korea are 

selected. For example, the United States anticipated expending approximately $3.67 billion as 
Page 15 GAO-14-280R Defense In-Kind Projects

part of the Land Partnership Plan initiative to relocate and consolidate infrastructure used by 

U.S. forces in the Republic of Korea, but the Republic of Korea–Funded Construction program 

has been used to offset about $2 billion of that planned expenditure. In addition, the Republic of 

Korea’s Logistics Cost Sharing, which is usually used for maintenance and repairs, included two 

in-kind renovation projects in fiscal years 2011 and 2012. After projects are selected, U.S. and 

Korean officials work together in the design and contracting process for in-kind projects, with the 

United States having full visibility into project costs. Other process differences affect project 

timelines. Specifically, officials stated that it can take up to 7 years to complete a project in 

South Korea and up to 14 years to complete a project in Japan after the need for a project is 

identified. 

Selection of In-Kind Projects to Support Initiatives for Enduring Installations within Japan and 

the Republic of Korea Generally Results from Priority-Based Processes

Programs in Japan and the Republic of Korea to support the enduring presence of U.S. forces

in those countries include the Japan Facilities Improvement Program and, for the Republic of 

Korea, the Republic of Korea–Funded Construction Program and the Logistics Cost Sharing 

Program. To select projects, a prioritized list is consolidated by U.S. forces, reviewed by the 

U.S. Pacific Command and the Office of the Secretary of Defense, and then returned for 

contracting and completion by the host nation. In Korea, the list prepared by U.S. forces is 

generally accepted as presented.7

DOD Has More Flexibility to Select In-Kind Projects in the Republic of Korea than in Japan

In contrast, the government of Japan selects projects begun 

in the Japan Facility Improvement Program, and, according to DOD officials, projects may be 

deliberated before the Japanese Diet, which is the national legislature of Japan.

There are notable differences in the degree to which DOD has flexibility to select in-kind

projects in Japan and the Republic of Korea. For example, according to DOD officials, the U.S. 

Forces Korea Commander has the ability to designate how resources provided by the Republic 

of Korea for in-kind projects will be allocated between Republic of Korea Funded Construction 

(to include support for the Land Partnership Plan) and Logistics Cost Sharing projects. This has 

allowed the United States to offset some of its planned expenditures to implement the Land 

Partnership Plan by using Republic of Korea–Funded Construction resources, which would 

continue to be available whether the force-structure initiative were being implemented or not.8

 7

The Republic of Korea has some prohibitions against specific project types, such as recreation facilities, and these 

are not presented for contracting and completion.

However, the government of Japan has final approval authority for projects selected in the 

Japan Facilities Improvement Program and selects projects from a prioritized list prepared by 

U.S. officials, but recognizes the need for improved facilities and the concerns of local 

communities. Under the latest agreements between the United States and Japan, the 

government of Japan is required to make its “best effort” to meet U.S. priorities, but has final 

approval authority for projects selected. Only 5 of the top 10 highest-priority projects proposed 

by U.S. authorities for initiation in 2011 were selected by the government of Japan for initiation 

during fiscal years 2011 and 2012. Other projects selected were either lower priority, or added 

8

The Republic of Korea supports force-structure initiatives through separate bilateral agreements, but the Special 

Measures Agreement defines an annual amount that the Republic of Korea will provide either in cash or in-kind. The 

contribution of the Republic of Korea for 2009 was 760 billion Korean won, and the 2010, 2011, 2012, and 2013 

contributions were determined by increasing the contribution of the previous year by the inflation rate (consumer price 

index). Expressed in dollars, the amount that the Republic of Korea provides is about $800 million for 2012.
Page 16 GAO-14-280R Defense In-Kind Projects

by the government of Japan to address local concerns. For example, two projects were selected 

to erect golf nets to protect local residences adjacent to golf courses on U.S. installations.

Processes for Selecting Domestic Projects Vary by the Military Department and the Type 

of In-Kind Payment

Domestically, the military departments generally use their existing real-estate leasing processes 

to select in-kind projects. DOD officials state that the military departments select projects based 

on military and operational need regardless of location, but the processes followed vary 

somewhat depending on the authorizing statute for the in-kind projects—for example, the 

authorities vary for enhanced-use leases, exchanges, and easements.

The Military Departments Generally Use Their Existing Real-Estate Leasing Processes to Select 

In-Kind Projects

The military departments generally select in-kind construction and renovation projects as part of 

the established real-estate leasing processes to provide leases, real-property exchanges, or 

easements to third parties. For example, the Army, Navy, and Air Force identify potential 

enhanced-use leases at the installation level, with the installation determining potential in-kind 

consideration requirements and providing them to the lessee. For all three departments, after 

the installation identifies the project requirements, the services conduct an economic and 

market feasibility study which includes, among other things, an analysis of site conditions, 

economic and demographic area data, and financial feasibility. Following its existing real-estate 

leasing process, a department puts out a request for qualifications to solicit developer interest in 

the project, selects a developer (sometimes using a competitive process), negotiates a business 

and leasing plan, requires environmental documentation (including historical and cultural), 

executes the lease, and administers the lease. Specifically, during the negotiation process, the 

service and the offeror work out the lease agreement and assess environmental impact and 

financial viability. If the lease terms are complex, how long it could take to negotiate the lease 

and develop the details of the arrangement varies among the departments and on a case-bycase basis. Similar processes are followed for exchanges and easements. For example, when 

the Army acquires facilities by exchange it is similar to the leasing process, with the valuation of 

property appraised to assure that fair market value is received by the military. According to Air 

Force officials, the Air Force’s process for granting an easement begins with the installation 

receiving an easement request from a potential user (e.g., local utility, landowner, or 

government entity), and the availability of space is approved by the Facilities Utilization Board,9

with the Air Force Civil Engineering Center approving the transaction.

There Are Variations among the Military Departments in How In-Kind Projects Are Selected

There are variations in the processes that the military departments use to select the in-kind 

projects.

10

 9

According to Air Force officials, the Facilities Utilization Board prioritizes every project in the civil engineering arena, 

to include in-kind payment projects, with the Wing Commander chairing the meeting. Officials stated that the board 

comprises members from the Air Base Wing, Air Armament Center, Special Forces Group, Test Wing, Civil Engineer 

Group, Special Operations Wing, Air Armament Center, Air Forces Research Lab, Ranger Training Brigade, Space 

Control Squadron, and Naval School Explosive Ordnance Disposal.

 For example, the Navy uses a two-phase approach for enhanced-use leases and 

10The Army was the only service that reported acquiring facilities by exchange within fiscal years 2011–2012 and the 

Air Force was the only service that reported granting an easement within the same years
Page 17 GAO-14-280R Defense In-Kind Projects

negotiates in-kind consideration as part of the process with notification to Congress before 

entering into the actual lease, including a description of any in-kind consideration that will be 

accepted.11 The Army’s process is similar to the Navy’s and begins with an installation 

identifying a potential enhanced-use lease and preparing a business proposal for the lease 

including the in-kind consideration, and the affected installation is allowed to select in-kind 

projects. However, while the Air Force installation does prepare an integrated priority list of 

unfunded projects to facilitate the selection of projects as in-kind consideration, the actual 

selection of in-kind projects is approved by the Director of the Air Force Civil Engineering Center 

rather than at the installation level. Air Force officials also stated that the granting of large 

easements is a relatively new process and variations may occur in the way in-kind projects are 

selected. For example, the Air Force’s easement with the Mid-Bay Bridge Authority in Florida 

included 20 negotiated in-kind projects approved by the Facilities Utilization Board, with the 

exception of one project. That project was a data-recovery project (similar to a survey), which 

went directly to the Air Base Wing Commander at Eglin Air Force Base because the project had 

potential cost savings for future projects, and was not part of constructing or renovating facilities 

for the Air Force in that fiscal year.

 11For certain leases entered into under 10 U.S.C. § 2667, a two-step notification process is required under section 

2662 of Title 10 of the United States Code.
Page 18 GAO-14-280R Defense In-Kind Projects

Enclosure III: Overseas In-Kind Construction and Renovation Projects Initiated for the 

Department of Defense during Fiscal Years 2011 and 2012

Host-nation support in Japan and South Korea resulted in the initiation of 68 in-kind construction 

and renovation projects valued at over $1.3 billion during fiscal years 2011–2012 (38 projects in 

Japan and 30 in South Korea). The estimate for Japan (about $257 million) does not include 

dollar values for 24 of the 38 in-kind projects initiated in Japan during this period since the 

government of Japan is not obligated to disclose the value of in-kind construction and 

renovation projects, and often does not disclose such costs. In Germany, residual value 

payments to the United States totaled about $11.3 million for 3 in-kind projects. In-kind projects 

initiated in Japan and South Korea during fiscal years 2011 and 2012 supported various 

purposes of the U.S. military’s presence in those nations.12 Most of the in-kind projects initiated 

in Japan were for operations and training (13 of 38 projects) and for housing and community 

facilities (12 of 38 projects). The remaining 13 of the 38 projects were for maintenance and 

production facilities, utility and ground improvements, supply facilities, and administrative 

facilities. Similarly, in South Korea most of the in-kind projects initiated were for housing and 

community facilities (10 of 30 projects) and for operations and training facilities (9 of 30 

projects). The other 11 projects were for maintenance and production facilities, supply facilities, 

administrative facilities, and hospital and medical facilities. Among other things, the National 

Defense Authorization Act for Fiscal Year 201313 requires that GAO provide a listing of each 

facility constructed or renovated for the Department of Defense (DOD) as payment in kind, the 

value in U.S. dollars of that construction or renovation, the source of the in-kind payment, the 

agreement pursuant to which the payment was made, and a description of the purpose and 

need for the construction or renovation. Table 3 provides a summary of the intended purposes 

and value of in-kind projects supporting U.S. forces initiated in Japan and South Korea during 

fiscal years 2011 and 2012. In tables 4, 5, and 6 we provide the information specified in the act 

in a listing of in-kind construction and renovation projects initiated in Japan, the Republic of 

Korea, and Germany, respectively, during fiscal years 2011 and 2012.

 12Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in Department of 

Defense, DOD Real Property Categorization, DOD Instruction 4165.03 (Aug. 24, 2012), and assignment of categories was 

confirmed with Pacific Command.

13 Pub. L. No. 112-239, § 2805 (2013).
Page 19 GAO-14-280R Defense In-Kind Projects

Table 3: Purposes and Values of In-Kind Construction and Renovation Projects Initiated in Japan and South 

Korea during Fiscal Years 2011 and 2012

Location

Number of 

projects

Approximate value 

(U.S. dollars in millions) Purpose

Japan

Total

2

0

12

3

13

1

7

 38

 Unavailablea

 0.00

 120.24b

 10.27b

 103.28b

 Unavailablea

 22.88b

 $256.67b

Administrative

Hospital and Medical

Housing and Community

Maintenance and Production

Operation and Training

Supply

Utility and Ground Improvements

Republic of Korea

Total

1

2

10

6

9

2

0

30

 $43.50c

 244.55

 452.02

 183.30

 93.40

 13.12

 0.00

$1,029.89

Administrative

Hospital and Medical

Housing and Community

Maintenance and Production

Operation and Training

Supply

Utility and Ground Improvements

Source: GAO summary of Department of Defense (DOD) data.

a

The estimates of value, when available, were provided by U.S. officials in then-year U.S. dollars without input from Japanese 

officials, based on comparable projects. Estimates were not available for 24 of 38 projects in Japan because the specific costs 

incurred by the government of Japan are not required to be disclosed, according to the provisions of bilateral agreements with the 

government of Japan.

b

Estimates given with a dollar value do not include costs for all projects in this category, and are therefore minimum values. Actual 

total values are unknown.

c

Values for projects in Korea are based on estimated costs to be incurred by the Republic of Korea in Korean won and expressed by 

DOD officials in then-year U.S. dollars.

Table 4: In-Kind Construction and Renovation Projects Initiated in Japan during Fiscal Years 2011 and 2012

Estimated values in U.S. dollars 

Component Location

Project title or number, 

purpose, and description

Agreement a or program

Source of inkind project b Estimated value

Air Force

c

Yokota Project number: AF626

Purpose: Maintenance and 

Production

Description: Reconstruction of 

aerospace ground equipment 

maintenance facility

Japan Facilities 

Improvement 

Programd

Host nation 

support

$10,270,000

Kadena Project number: AF734

Purpose: Operation and Training

Description: Construct aircraft 

parking apron

Special Action 

Committee on 

Okinawae

Host nation 

support 

18,320,000

Kadena Project number: AF737

Purpose: Operation and Training

Description: Aircraft taxiway

Special Action 

Committee on 

Okinawae

Host nation 

support 

24,990,000
Page 20 GAO-14-280R Defense In-Kind Projects

Kadena Project number: AF758

Purpose: Operation and Training

Description: Aircraft parking 

space

Special Action 

Committee on 

Okinawae

Host nation 

support 

Not available

Kadena Project number: AF777

Purpose: Administrative

Description: Consolidated 

parking

Special Action 

Committee on 

Okinawae

Host nation 

support 

Not available

Yokota Project Number: AF0012-T

Purpose: Administrative

Description: Air defense 

command parking structures

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Kadena Project number: AF739

Purpose: Utility and Ground 

Improvements

Description: Utility upgrade

Special Action 

Committee on 

Okinawae

Host nation 

support 

10,040,000

Army Zama Project number: AR0001-T

Purpose: Housing and 

Community

Description: Reconstruction of 

family housing

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Hiro Project Number: AR814

Purpose: Operation and Training

Description: Disaster prevention

Japan Facilities 

Improvement 

Programd

Host nation 

support 

5,130,000

Zama Project number: AR1103

Purpose: Housing and 

Community

Description: Golf net to protect 

local community residences 

adjacent to golf course on Camp 

Zama

Japan Facilities 

Improvement 

Programd

Host nation 

support 

2,900,000

Zama Project number: AR0003-T

Purpose: Housing and 

Community

Description: Outdoor skate rink to 

replace skate rink displaced by 

relocation of a new morale, 

welfare, and recreation facility

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Sagamihara Project Number: AR0020-T

Purpose: Housing and 

Community

Description: Outdoor recreation 

and sports facility, community 

center

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Sagamihara Project Number: AR0024-T

Purpose: Housing and 

Community 

Description: Rental storage 

sheds

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available
Page 21 GAO-14-280R Defense In-Kind Projects

Sagamihara Project Number: AR0027-T

Purpose: Housing and 

Community

Description: Community support 

facility

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Sagami Project Number: AR-0018-T 

Purpose: Utility and Ground 

Improvements

Description: Road upgrade

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Sagamihara Project Number: AR-0031-T 

Purpose: Utility and Ground 

Improvements

Description: Utility upgrade

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Marine Corps Iwakuni Project Number: MC0404-T

Purpose: Supply

Description: Humidity controlled 

warehouse

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC150-T

Purpose: Maintenance and 

Production

Description: Marine aviation 

logistics center, maintenance 

facility

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC157-T

Purpose: Operation and Training

Description: Flight line fire 

station

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC164-T

Purpose: Operation and Training

Description: Airfield pavement

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC165-T

Purpose: Operation and Training

Description: Aircraft 

maintenance hangar

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC250-T

Purpose: Maintenance and 

Production

Description: Aviation 

intermediate maintenance 

detachment

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC909-T

Purpose: Operation and Training

Description: Aircraft direct 

fueling systems

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC275-T

Purpose: Housing and 

Community

Description: Armed Forces 

Network antenna

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available
Page 22 GAO-14-280R Defense In-Kind Projects

Iwakuni Project Number: MC160-T

Purpose: Operation and Training

Description: North gate 

reconstruction

Defense Policy 

Review 

Initiativef

Host nation 

support Not available

Iwakuni Project Number: MC163-T

Purpose: Housing and 

Community

Description: Relocation of north 

side unaccompanied enlisted

housing

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC0133

Purpose: Utility and Ground 

Improvements 

Description: Sewer system 

upgrade

Japan Facilities 

Improvement 

Programd

Host nation 

support 

4,410,000

Northern 

training area

Project Number: MC111

Purpose: Utility and Ground 

Improvements

Description: Utilities upgrade

Japan Facilities 

Improvement 

Programd

Host nation 

support 

8,430,000

Iwakuni Project Number: MC447-T

Purpose: Utility and Ground 

Improvements

Description: East utility plant

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC201-T

Purpose: Operation and Training

Description: Marine Aircraft 

Group 12 dual squadron aircraft 

hangar

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Iwakuni Project Number: MC0421-T

Purpose: Operation and Training

Description: Marine Aircraft 

Group 12 dual squadron aircraft 

hangar

Defense Policy 

Review 

Initiativef

Host nation 

support 

Not available

Navy Ikego Project Number: NA218

Purpose: Housing and 

Community

Description: Elementary school

Japan Facilities 

Improvement 

Programd

Host nation 

support 

40,900,000

Kadena Project Number: NA859

Purpose: Operation and Training

Description: Aircraft 

maintenance hangar

Special Action 

Committee on 

Okinawae

Host nation 

support 

49,220,000

Atsugi Project Number: NA939

Purpose: Housing and 

Community

Description: Golf net to protect 

local community residences 

adjacent to golf course at Naval 

Air Facility Atsugi

Japan Facilities 

Improvement 

Programd

Host nation 

support 

3,630,000
Page 23 GAO-14-280R Defense In-Kind Projects

Source: GAO analysis of DOD information.

a

Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 

4165.03, DOD Real Property Categorization, (Aug. 24, 2012) with approval of U.S. Pacific Command and U.S. Forces Japan. 

b

All projects in Japan are accepted as part of the Agreement between the United States of America and Japan Concerning New 

Special Measures Relating to Article XXIV of the Agreement Under Article VI of the Treaty of Mutual Cooperation and Security 

between the United States of America and Japan, Regarding Facilities and Areas and the Status of United States Armed Forces in 

Japan (Apr. 1, 2011). In-kind projects initiated in fiscal years 2011 and 2012 are begun either as part of the bilaterally agreed-upon 

force-structure initiatives known as the Defense Posture Review Initiative and the Special Action Committee on Okinawa, or under a 

program of the government of Japan known as the Facilities Improvement Program.

c

Estimated values were provided by DOD in then-year dollars. These estimates, when available, were developed by U.S. officials in 

Japan on the basis of comparisons with prior costs of similar projects. 

d

See U.S.–Japan Security Consultative Committee Document, Host Nation Support (June 21, 2011). This document indicated that 

Facilities Improvement Program funding in the current Special Measures Agreement period will be no less than 20.6 billion yen per 

year. The Japan Facilities Improvement Program is a government of Japan initiative, which started in 1979 to ease the financial 

burden of stationing U.S. forces in Japan. The program reduces U.S. government cost to improve the quality of life and military 

posture.

e

See Special Action Committee on Okinawa, SACO Final Report (Dec. 2, 1996). The Special Action Committee on Okinawa was 

established in November 1995 by the governments of Japan and the United States. The two governments launched the SACO 

process to reduce the burden on the people of Okinawa and thereby strengthen the Japan–United States alliance. 

f

See U.S.–Japan Security Consultative Committee Document, United States–Japan Roadmap for Realignment Implementation (May 

1, 2006), which finalized key implementation details of the proposed realignment of U.S. Forces in Japan.

Yokose Project Number: NA894

Purpose: Operation and Training

Description: Fire station and 

security facility

Japan Facilities 

Improvement 

Programd

Host nation 

support 

5,620,000

Zukeran Project Number: NA842

Purpose: Housing and 

Community

Description: Unaccompanied 

enlisted housing

Special Action 

Committee on 

Okinawae

Host nation 

support 

21,410,000

Zukeran Project Number: NA873

Purpose: Utility and Ground 

Improvements

Description: Secondary water 

source and tank

Special Action 

Committee on 

Okinawae

Host nation 

support 

Not available

Yokosuka Project Number: NA908

Purpose: Housing and 

Community

Description: Unaccompanied 

enlisted housing

Japan Facilities 

Improvement 

Programd

Host nation 

support 

51,400,000
Page 24 GAO-14-280R Defense In-Kind Projects

Table 5: In-Kind Construction and Renovation Projects Initiated in the Republic of Korea during Fiscal Years 

2011 and 2012

Estimated values in U.S. dollars

Component Location

Project title or number, purpose, and 

description

Agreement or 

program a

Source of 

in-kind 

project b

Estimated 

value

Air Force

c

Osan Air 

Base

Project Title: Construct Hot Cargo Pad

Purpose: Operation and Training

Description: New end-of-runway 

arm/disarm pad to provide adequate 

areas for arming and disarming of 

aircraft to mitigate safety violations

Land 

Partnership 

Plan

Host 

nation 

support d

$10,200.000

Kunsan Air 

Base

Project Title: Maintenance Complex

(Phase 2) Accessory Shop

Purpose: Maintenance and Production 

Description: Aircraft maintenance 

facilities to repair and maintain F-16 

component parts

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

13,000,000

Osan Air 

Base

Project Title: Consolidated Radar 

Approach Control/Airfield 

Management/Tower Facility 

Purpose: Operation and Training

Description: Airfield management 

facility with control tower, weather, 

flight planning, dispatch, and lounge

Land 

Partnership 

Plan

Host 

nation 

support d

16,600,000

Osan Air 

Base

Project Title: Construct 36th

Purpose: Operation and Training

Fighter 

Squadron Operations and Aircraft 

Maintenance Unit Facility

Description: Construction of 

semihardened building to house 36th

Fighter Squadron Operations and 

Aircraft Maintenance Unit personnel 

that includes new chemical-biological 

collective protection system, work 

spaces for existing squadron 

operations personnel, and features to 

support the upgraded Common 

Configuration Implementation Program 

aircraft—to support features required 

for survivability during contingency and 

wartime operations

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

25,000,000
Page 25 GAO-14-280R Defense In-Kind Projects

Kunsan Air 

Base

Project Title: Munitions Storage Igloos 

(14 each)

Purpose: Supply

Description: Construction of 14 

munitions storage igloos and 

demolition of 20 module barricaded 

storage pads—to increase munitions 

storage ability and reduce existing 

explosive hazards

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

12,900,000

Osan Air 

Base

Project Title: Construct New End-of 

Runway Arm/Disarm Pad 

Purpose: Operation and Training

Description: End of runway arm/disarm 

pad and demolition of old ones—to 

provide adequate areas for arming and

disarming of aircraft in order to mitigate 

safety violations

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

13,200,000

Osan Air 

Base

Project Title: Construct Joint NonCommissioned Officers Dormitory

Purpose: Housing and Community

Description: Construction of 

multistory, 277-person dormitory for 

joint noncommissioned officers (with 

fire protection system, force 

protection measures, splinter 

protection measures, 

communications, and emergency 

generators; one-bedroom living units, 

multipurpose activity rooms, public 

restrooms, bulk storage, and 

mechanical rooms)—to eliminate the 

deficiency in unaccompanied 

personnel housing for senior enlisted 

personnel currently living off base and 

better utilize existing dormitory space,

grades E-5 to E-6

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

47,000,000
Page 26 GAO-14-280R Defense In-Kind Projects

Army Army 

Garrison 

Humphreys

Project Title: Elementary School

Purpose: Housing and Community

Description: Construction of an 875-

student Department of Defense 

Dependent School Elementary School 

according to Department of Defense 

Education Activity specifications (e.g., 

classrooms, shops, auditorium, 

multipurpose rooms, and cafeteria with 

kitchen, gymnasium, information 

center, and administrative areas)—to 

provide elementary school facilities for 

the dependents of military and DOD 

civilian workforce relocating to Army 

Garrison Humphreys

Yongsan 

Relocation 

Plan

Host 

nation 

support f

45,638,000

Army 

Garrison 

Humphreys

Project Title: High School

Purpose: Housing and Community

Description: Construction of a 950-

student Department of Defense 

Dependent School High School 

according to Department of Defense 

Education Activity specifications (e.g., 

classrooms, shops, auditorium, 

multipurpose rooms, and cafeteria with 

kitchen, gymnasium, information center, 

and administrative areas)—to provide 

high school facilities for dependents of 

military and DOD civilian workforce 

relocating to Army Garrison Humphreys 

Yongsan 

Relocation 

Plan

Host 

nation 

support f

74,091,000

Army 

Garrison 

Humphreys

Project Title: Child Development Center

Purpose: Housing and Community

Description: Large (338 children) 

standard-design child-development 

center with adjacent outdoor play area 

(16,900 square feet) for children 

between the ages of 6 weeks and 5 

years—to provide required child-care 

support to military and DOD civilian 

workforce relocating to Army Garrison 

Humphreys

Land 

Partnership 

Plan

Host 

nation 

support d

12,600,000

Army 

Garrison 

Humphreys

Project Title: Dental Clinic and Medical 

Brigade Headquarters Building

Purpose: Hospital and Medical

Description: 3,784 square meter dental 

clinic

Yongsan 

Relocation 

Plan

Host 

nation 

support f

25,909,000
Page 27 GAO-14-280R Defense In-Kind Projects

Army 

Garrison 

Humphreys

Project Title: Hospital and Ambulatory 

Care Center

Purpose: Hospital and Medical

Description: 379,752-square-foot 

hospital with 800-space parking lot—to 

relocate existing or similar facilities 

located on Army Garrison Yongsan to 

Army Garrison Humphreys to provide 

medical treatment services for 

servicemembers and their dependents 

relocating to Army Garrison Humphreys 

Yongsan 

Relocation 

Plan

Host 

nation 

support f

218,642,000

Rodriguez 

Live-Fire 

Complex

Project Title: Directorate of Public 

Works Sub-Station

Purpose: Maintenance and Production

Description: 1,083-square-meter facility 

housing electrical, heating ventilation 

and air conditioning, carpentry, paint, 

sheet metal, and masonry shops; 

administrative offices; and warehouse 

storage space to support Directorate of 

Public Works operations at Rodriguez 

Live Fire Complex—to provide 

engineering services and maintenance 

to buildings, facilities, utilities, and 

grounds at the Rodriguez Live Fire 

Complex

Land 

Partnership 

Plan

Host 

nation 

support d

4,600,000

Camp 

Carroll

Project Title: Multipurpose Training 

Facility

Purpose: Operation and Training

Description: Training facility and 

auditorium for approximately 1,830 

military personnel

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

 3,500,000

Army 

Garrison 

Humphreys

Project Title: Consolidated Heavy 

Brigade Combat Team Headquarters

Purpose: Administrative

Description: Consolidated Heavy 

Brigade Combat Team headquarters 

building

Land 

Partnership 

Plan

Host 

nation 

support d

 43,500,000

Rodriguez 

Live-Fire 

Complex

Project Title: Vehicle Maintenance 

Facility

Purpose: Maintenance and Production

Description: 530-square-meter, twobay vehicle maintenance facility to 

support tanks, armored vehicles, and 

other heavy tactical equipment

Land Partnership 

Plan

Host 

nation 

support

d

 2,600,000
Page 28 GAO-14-280R Defense In-Kind Projects

Army 

Garrison 

Humphreys

Project Title: Type II Aircraft Parking

Purpose: Operation and Training

Description: 294-square-foot concrete 

masonry block transmitter building with 

525,000 square feet of Type II rotarywing aircraft parking apron (capacity 

for 16 rotary-wing aircraft)—to upgrade 

and expand existing rotary-wing aircraft 

parking, which had been displaced due 

to other projects associated with 

relocation of units to Army Garrison 

Humphreys

Land 

Partnership 

Plan

Host 

nation 

support d

6,700,000

Army 

Garrison 

Humphreys

Project Title: Warrior Support Area 

Distribution Node

Purpose: Operation and Training

Description: 599-square-meter 

Communications Node building (Signal 

Complex) with supporting privately 

owned and government-owned vehicle 

parking areas

Land 

Partnership 

Plan

Host 

nation 

support d

3,700,000

Army 

Garrison 

Humphreys

Project Title: Heavy Brigade Combat 

Team Vehicle Maintenance Facilities I 

Purpose: Maintenance and Production

Description: Two standard-design 

medium tactical equipment 

maintenance facility complexes, each 

with a five-company operations facility, 

supporting storage facilities, and 

tracked vehicle parking

Land 

Partnership 

Plan

Host 

nation 

support d

60,000,000

Army 

Garrison 

Humphreys

Project Title: Fires Support Vehicle 

Maintenance Facilities II

Purpose: Maintenance and Production

Description: Standard-design, 35,290-

square-foot medium tactical equipmentmaintenance facility, three company 

operations facilities, supporting storage 

facilities, and tracked vehicle parking

Land 

Partnership 

Plan

Host 

nation 

support d

62,100,000
Page 29 GAO-14-280R Defense In-Kind Projects

Army 

Garrison 

Humphreys

Project Title: Heavy Brigade Combat 

Team Vehicle Maintenance Facilities II

Purpose: Maintenance and Production

Description: Standard medium tactical 

equipment-maintenance facility with a 

five-company operations facility, 

storage facilities, and organizational 

vehicle parking

Land 

Partnership 

Plan

Host 

nation 

support d

 41,000,000

K-16 (Seoul) Project Title: Commissary

Purpose: Housing and Community

Description: 752.5-square-meter 

commissary with areas for sales, 

electronic checkout, receiving, food 

preparation, cold and freeze storage 

and loading dock—to provide 

commissary support for 1,200 soldiers 

and family members residing in vicinity 

of K-16 Airfield, which will be the 

northernmost enduring installation and 

only Seoul Metropolitan Area 

installation after Yongsan Relocation 

and Land Partnership Plans are 

executed

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

 3,800,000

Army 

Garrison 

Humphreys

Project Title: Heavy Brigade Combat

Team Barracks and Dining Facility

Purpose: Housing and Community

Description: Heavy Brigade Combat 

Team barracks and dining facility

Land 

Partnership 

Plan

Host 

nation 

support d

 92,000,000

Army 

Garrison 

Humphreys

Project Title: Enlisted Barracks and 

Dining Facilities

Purpose: Housing and Community

Description: Standard-design 302-

person eight-story unaccompanied 

enlisted personnel housing (1+1E 

standard) and two standard-design 

1,300-person dining facilities—to 

provide sufficient enlisted personnel 

barracks and dining facilities on Army 

Garrison Humphreys capable of 

meeting requirements generated by 

units relocating to Army Garrison 

Humphreys

Land 

Partnership 

Plan

Host nation 

support d

51,000,000
Page 30 GAO-14-280R Defense In-Kind Projects

Army 

Garrison 

Humphreys

Project Title: Heavy Brigade Combat 

Team Barracks Part 1 of 2

Purpose: Housing and Community

Description: Four standard-design, 

302-person eight-story unaccompanied 

enlisted personnel housing (1+1E 

standard) and one standard design 

physical fitness center—to provide 

sufficient enlisted personnel barracks 

and physical fitness facilities on Army 

Garrison Humphreys capable of 

meeting requirements generated by 

units relocating to Army Garrison 

Humphreys

Land 

Partnership 

Plan

Host nation 

support d

120,300,00

0

Marine 

Corps

Pohang Project Title: Replace Aircraft 

Revetments

Purpose: Operation and Training

Description: Removal and 

replacement of deteriorated metal bin 

revetments (explosive containment 

structures) to provide splinter 

protection for fighter aircraft

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

4,900,000

Yechon Project Title: Replace Aircraft 

Revetments

Purpose: Operation and Training

Description: Removal and 

replacement of deteriorated metal bin 

revetments (explosive containment 

structures) to provide splinter 

protection for fighter aircraft

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

9,600,000

Navy Fleet 

Activities 

Chinhae

Project Title: Supply/Logistics Office 

Renovation

Purpose: Supply

Description: Renovation and 

extension of existing supply/logistics 

building (i.e., office spaces for Human 

Resource Office personnel and 

supply logistics personnel to support 

relocation of Human Resource Office 

from Building 606)

Logistics Cost 

Sharing

Host 

nation 

support

g

218,000
Page 31 GAO-14-280R Defense In-Kind Projects

Fleet 

Activities 

Chinhae

Project Title: Fire Station Renovation

Purpose: Housing and Community

Description: Renovation of existing 

fire station facility (Building 776) to 

support relocation of security 

department administrative offices 

from building 612 (i.e., renovation of 

men’s and women’s toilets and 

accessories and mechanical and 

electrical spaces and replacement of 

existing interior floors, bases, walls, 

ceilings, doors, windows, 

mechanical/electrical/fire 

suppression/communication and 

information systems)

Logistics Cost 

Sharing

Host 

nation 

support

g

1,099,000

Camp 

Mujuk

Project Title: Personnel Barracks for 

Helicopter Mine Countermeasures 

Squadron 14 Detachment

Purpose: Housing and Community

Description: Construction of a 13,000-

square-foot, two-story bachelor 

quarters with reinforced concrete 

exterior bearing walls, concrete floor 

slabs and foundations, and metal 

roofing—required to provide adequate 

bachelor quarters for personnel at the 

Tri-Service Hangar and detachment 

compound

Republic of 

Korea–Funded 

Construction

Host 

nation 

support e

4,500,000

Source: GAO analysis of DOD information.

a

Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 

4165.03, DOD Real Property Categorization, (Aug. 24, 2012) with approval of categories assigned by U.S. Pacific Command and 

U.S. Forces Korea. 

b

Republic of Korea–Funded Construction and Logistics Cost Sharing projects in the Republic of Korea are subject to the Agreement 

Between the United States of America and the Republic of Korea Concerning Special Measures Relating to Article V of the 

Agreement Under Article IV of the Mutual Defense Treaty Between The Republic of Korea and the United States of America 

Regarding Facilities and Areas and the Status of United States Armed Forces in the Republic of Korea (Jan. 15, 2009), and 

implementation arrangements for the Special Measures Agreement related to Republic of Korea–funded construction of In-Kind 

Projects under the Calendar Year 2009-2013 Implementation Arrangement.

c

Estimated values were provided by DOD in then-year dollars. These estimates were provided by U.S. officials in Korea after 

converting figures provided by Republic of Korea officials for each project to U.S. dollars. 

d

See Agreement between the United States of America and the Republic of Korea amending the agreement between the United 

States of America and the Republic of Korea for the Land Partnership Plan of March 29, 2002 (Oct. 26, 2004).

e

See Article I of the Special Measures Agreement stating that the Republic of Korea shall bear, for the duration of this agreement a 

part of the expenditures associated with the stationing of the United Stated Armed Forces in Korea. This contribution of the Republic 

of Korea includes Republic of Korea–Funded Construction. 
Page 32 GAO-14-280R Defense In-Kind Projects

f

See Memorandum of Agreement between the Government of the Republic of Korea and the Government of the United States of 

America Regarding the Agreed Recommendation for Implementation of the Agreement between the Republic of Korea and the 

United States of America on the Relocation of United States Forces from the Seoul Metropolitan Area (Oct. 26, 2004) (known as the 

Yongsan Relocation Plan).

g

See Articles I and II of the Special Measures Agreement related to Republic of Korea–funded construction of In-Kind Projects under 

the Calendar Year 2009-2013 Implementation Arrangement stating that the Republic of Korea shall bear, for the duration of this 

agreement a part of the expenditures associated with the stationing of the United Stated Armed Forces in Korea. This contribution of 

the Republic of Korea includes Logistics Cost Sharing. 

Table 6: In-Kind Construction and Renovation Projects Initiated in Germany during Fiscal Years 2011 and 

2012

Estimated values in U.S. dollars

Component Location

Project title or number, 

purpose, and description

Agreement or 

a program

Source of 

in-kind 

project b

Estimated 

value c

Air Force

d

Spangdahlem 

Air Base

Project Title: Base Expansion

Purpose: Operation and Training

Description: Development of 

approximately 85 acres of existing 

farmland and forest area by 

constructing common area 

infrastructure—the first step required 

to develop an expansion area so the 

52nd Fighter Wing can smoothly 

enhance its mission at Spangdahlem 

Air Base as part of the Spangdahlem 

enhancement plan and to support the 

Spangdahlem consolidation plan

Agreement 

between U.S. 

contracting 

officer and 

German 

Construction 

Administration

Residual 

value 

payment

$7,700,000

Army Hainerberg 

Housing and 

Shopping 

Center

Project Title: Site Preparation

Purpose: Housing and Community

Description: Site preparation 

including road demolition, tree 

cutting, removal-relocation of 

infrastructure to prepare the site for 

follow-on, nonappropriated funds 

construction of a post exchange and 

commissary for work that contributes 

to the overall installation development

Agreement 

between U.S. 

contracting 

officer and 

German 

Construction 

Administration

Residual 

value 

payment

3,296,000

Moehringen

Family 

Housing

Project Title: Family Housing 

Additions

Purpose: Housing and Community

Description: Construction of building 

additions to three single houses 

Agreement 

between U.S. 

contracting 

officer and 

German 

Residual 

value 

payment

263,000
Page 33 GAO-14-280R Defense In-Kind Projects

(approximately 215 square feet per 

unit) to increase size of single houses 

to meet the benchmark size 

standards outlined in U.S. 

Department of Defense, Unified 

Facilities Criteria 4-711-7, Family 

Housing (July 13, 2006)e

Construction 

Administration

Source: GAO analysis of Department of Defense (DOD) information.

a

Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 

4165.03, DOD Real Property Categorization, (Aug. 24, 2012) and confirmed with the U.S. European Command.

b

See the National Defense Authorization Act for Fiscal Year 1991, Pub. L. No. 101-510, § 2921, as amended (10 U.S.C § 2687 

note), which indicates that it is the sense of Congress that the Secretary of Defense should take steps to ensure that the United 

States receive consideration equal to the fair market value of the improvements it made to facilities that will be returned to host 

countries. This provision includes the option for DOD to recover nonmonetary payment in kind in lieu of monetary compensation. 

DOD officials indicated that all agreements listed in this table were undertaken with this authority.

c

“Residual value” is the negotiated monetary or nonmonetary compensation host nations provide to DOD following the return of 

DOD-funded facilities or other capital improvements to a host nation.

d

Estimated values were provided by DOD in then-year dollars. These estimates were provided by U.S. officials in Germany after 

converting figures provided by German officials for each project to U.S. dollars.

e

We did not evaluate the validity of the need or description expressed by DOD. For more information related to projects in Germany,

see Committee on Armed Services, U.S. Senate, Inquiry Into U.S. Costs and Allied Contributions to Support the U.S. Military 

Presence Overseas, S. Rep. No. 113-12 (2013); and DOD Department of Defense Inspector General, DOD Can Improve Its 

Accounting for Residual Value From the Sale of U.S. Facilities in Europe, DODIG-2012-082 (Alexandria, Va.: May 4, 2012). 
Page 34 GAO-14-280R Defense In-Kind Projects

Enclosure IV: Domestic In-Kind Construction and Renovation Projects Initiated for the 

Department of Defense during Fiscal Years 2011 and 2012

Domestically, the military services—the Army, Navy, and Air Force—initiated 36 in-kind 

construction and renovation projects that, on the basis of service estimates, total $421.1 million. 

Of the 36 in-kind projects, 1 project (totaling an estimated value of $334 million) went to the 

Army’s single housing and community project; 3 projects (one from each military department) 

totaling an estimated value of $73.4 million went to construction or renovation projects involving 

operation and training,14 and the balance of 32 (from all three military departments) totaling an 

estimated value of $13.7 million were for purposes such as real-property capitalization, utility 

and ground improvements, supply, real-property management, and facility condition 

assessment.15

 14Although there were four projects, cost data was not available for one Army mission/operations support project.

Comparatively, the Air Force had the most in-kind projects for fiscal years 2011-

2012 (24 projects) compared to the Army (5 projects) and Navy (7 projects). Specifically, within 

its 24 projects, the Air Force granted an easement with a state agency, Florida’s Mid-Bay Bridge 

Authority, with an estimated value of about $8 million, in exchange for building a road connector 

on Air Force property. Eglin Air Force Base negotiated 20 in-kind projects primarily going 

towards mission/operations support under its easement with the Mid-Bay Bridge Authority. The 

20 in-kind projects under the easement alone constituted almost 83 percent of all the Air Force’s 

in-kind construction and renovation projects in fiscal years 2011-2012. Among other things, the

National Defense Authorization Act for Fiscal Year 2013 requires that GAO provide a listing of 

each facility constructed or renovated for the Department of Defense (DOD) as payment in kind, 

the value in U.S. dollars of that construction or renovation, the source of the in-kind payment, 

the agreement pursuant to which the payment was made, and a description of the purpose and 

need for the construction or renovation. Table 7 summarizes the domestic construction and 

renovation projects that used in-kind payments initiated in fiscal years 2011 and 2012. In table 

8, we provide the information specified in the act in a listing of in-kind construction and 

renovation projects initiated within the continental United States for DOD during fiscal years 

2011 and 2012.

15Army Lodging Privatization is included in our sample for the purpose of completeness, but, according to DOD 

officials, this program differs in significant ways from the other in-kind projects listed here. While the lodging and 

housing privatization programs result in private in-kind construction or renovation of facilities that, in some cases, 

continue to be owned by DOD and will be returned to DOD at the conclusion of the relevant lease term, according to 

DOD officials, the purpose of these programs is to construct or renovate facilities to rent to servicemembers, not to 

obtain construction or renovation services of DOD facilities in-kind. These officials also note that due to the length of 

the leases in question (a typical lease term is 50–75 years) the facilities in question will not return to the department 

until late in their useful lives, which underscores the fact that these agreements are not intended to obtain 

construction or renovation in-kind.
Page 35 GAO-14-280R Defense In-Kind Projects

Table 7: Domestic Construction and Renovation Projects That Used In-Kind Payments Initiated by the 

Military Departments in Fiscal Years 2011 and 2012

Military department Number of 

projects

Approximate value (U.S. 

dollars)

Purpose

Army

Total

1

2

1

1

5

$334,000,000

 66,000,000a

 270,005

 1,020,000

 $401,290,005

Housing and Community

Operation and Training

Real Property Capitalization

Supply

Navyb

Total

4

1

2

 7

$1,176,323

 320,256

 3,086,099

 $4,582,678

Utility and Ground Improvements

Operation and Training

Housing and Community

Air Force

Total 

1

1

4

 14

1

2

1 

 24 

7,091,641

 40,406

1,338,934

5,445,593

 103,650

 605,392

 621,245

 $15,246,861

Operation and Training

Real Property Management

Utility and Ground Improvements

Real Property Capitalization

Facility Condition Assessment

Housing and Community

Supply

Total 36 $421,119,544 

Source: GAO summary of Department of Defense (DOD) data.

a

Cost data were not available for one of the two mission/operations support projects.

b

The Marine Corps reported no domestic construction or renovation projects using in-kind payments in fiscal years 2011–2012.

Table 8: In-Kind Construction and Renovation Projects Initiated within the Continental United States for the 

Department of Defense (DOD) during Fiscal Years 2011 and 2012

Estimated values in U.S. dollars 

Component Location

Project title or number, 

purpose, and descriptiona Agreement or program 

Source of 

in-kind 

project 

Estimated 

valueb

Navy Virginia Project Title: Solar Speed 

Warning Sign

Purpose: Utility and Ground 

Improvements

Description: Solar speed 

warning sign

Sprintcom, Inc. 

(Telecom: antennas on 

tower) 

Agreement #:

N62470-00-RP-00165

Outleasec $19,962

Virginia Project Title: Illuminated 

Crosswalk System

Purpose: Utility and Ground 

Improvements

Description: Illuminated 

crosswalk system

Global Signal 

Acquisitions II, LLC 

(Telecom: cell tower)

Agreement #: 

N62470-12-RP-00002

 Outleasec 96,905
Page 36 GAO-14-280R Defense In-Kind Projects

Florida Project Title: Lighting/Security 

Monitors

Purpose: Utility and Ground 

Improvements

Description: Lighting/security 

monitors to provide 

security/lighting for six 

locations at Port Ops and along 

the Mole Pier in Key West

City of Key West

Agreement #: 

N69467-03-RP-00077

Enhanceduse leasec

377,755

California Project title: Military Working 

Dog Facility

Purpose: Operation and 

Training

Description: Design and 

installation of military working 

dog facility at Point Mugu and 

Port Hueneme—to design and 

construct two fenced exercise 

areas including grass covering, 

irrigation, waste cleanup 

system and animal watering 

equipment

Global Auto Processing 

Services, Inc. (Land: 78 

acres)

Agreement #: 

N62473-07-RP-00046

Enhanceduse leasec

320,256

California Project title: Repairs to Ship 

Stores and Theater (San 

Nicolas Island)

Purpose: Housing and 

Community

Description: Repairs to Ship 

Store and Station Theater, San 

Nicolas Island, Building SNI151—to improve quality of life 

at remote island location, 

sustain morale, welfare, and 

recreation and ship store 

operations and comply with 

National Fire Protection 

Association requirements

Global Auto Processing 

Services, Inc. (Land: 78 

acres)

Agreement #: 

N62473-07-RP-00046

Enhanceduse leasec

2,293,000

California Project title: Repairs to SurfNet 

Club and Building PM-20

Purpose: Housing and 

Community

Description: Repairs to SurfNet 

Club, Point Mugu Building PMGlobal Auto Processing 

Services, Inc. (Land: 78 

acres)

Agreement #: 

N62473-07-RP-00046

Enhanceduse leasec

793,099
Page 37 GAO-14-280R Defense In-Kind Projects

20—to improve quality of life for 

enlisted troops at Point Mugu. 

Facility primarily serves as 

Internet café and social 

gathering place for off-duty 

sailors.

California Project title: Lighted 

Crosswalks/Street Lighting

Purpose: Utility and Ground 

Improvements 

Description: Lighted 

crosswalks/street lighting for 

base beautification

National Steel and 

Shipbuilding Company

Agreement #: 

N62473-07-RP-00084

Enhanceduse leasec

681,701

Air Force Texas Project title: Real Property 

Boundary Survey

Purpose: Real Property 

Management

Description: Metes and 

Bounds survey of enhanceduse lease property at Joint 

Base San Antonio Fort Sam 

Houston

Old Brook Army Medical 

Center II Enhanced-Use 

Lease

Agreement #: 

DACA63-1-07-0554

Enhanceduse leasec

40,406c

Texas Project title: Design/Build 

Storm Water Detention 

Structure

Purpose: Utility and Ground 

Improvement 

Description: Detention pond 

drainage—to design and 

construct detention pond 

outflow for property at Joint 

Base San Antonio Fort Sam 

Houston

Old Brook Army Medical 

Center II Enhanced-Use 

Lease

Agreement #: 

DACA63-1-07-0554

Enhanceduse leasec

239,469c

Utah Project title: Construct Security 

Building

Purpose: Operation and 

Training

Description: Building 408—to 

provide new facility to meet 

mission requirements and 

replace substandard facility for 

Security Forces / Office of 

Master Lease

Agreement #: 

AFMC-HL-1-08-666

Enhanceduse leasec7,091,641
Page 38 GAO-14-280R Defense In-Kind Projects

Special Investigations

Florida Project title: Site Preparation

Purpose: Utility and Ground 

Improvements

Description: Data recovery at 

Federal Prison Camp to 

prepare site for construction 

project

Mid-Bay Bridge 

Easement 

Agreement #: 

AFMC-EG-2-09-001

Easement 868,766 c

Florida Project title: Solar Pool Water 

Heater

Purpose: Housing and 

Community

Description: Solar water heater

for base pool

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 158,392 c

Florida Project title: Locker Room 

Renovation

Purpose: Housing and 

Community

Description: Renovation of 

locker room at Oak Hill building

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 447,000 c

Florida Project title: Munitions Storage 

Building

Purpose: Supply

Description: Munitions storage 

building 

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 621,245 c

Florida Project title: Roof Replacement

Purpose: Real Property 

Recapitalization

Description: Replacement of 

roof for Building 18C

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easementc 224,540

Florida Project title: Roof Replacement

Purpose: Real Property 

Recapitalization

Description: Replacement of 

roof for Buildings 1759 and 

1762

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 149,178 c

Florida Project title: Roof Replacement Mid-Bay Bridge Easement 174,651 c
Page 39 GAO-14-280R Defense In-Kind Projects

Purpose: Real Property 

Recapitalization

Description: Replacement of 

roof for Building 253

Easement

Agreement #: 

AFMC-EG-2-09-001

Florida Project title: Bridge Inspection 

Services

Purpose: Facility Condition 

Assessment

Description: Inspect installation 

bridges for repairs

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 103,650 c

Florida Project title: Roof Replacement

Purpose: Real Property 

Recapitalization

Description: Replacement of 

roof for Buildings 95 and 101

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 215,181 c

Florida Project title: Roof Replacement

Purpose: Real Property 

Recapitalization

Description: Replacement of 

roof for Building 134

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 843,000 c

Florida Project title: Roof Replacement

Purpose: Real Property 

Recapitalization

Description: Replacements of 

roof for Buildings 102 and 

102A

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 736,279 c

Florida Project title: Roof 

Replacement/Lightning 

Protection

Purpose: Real Property 

Recapitalization

Description: Replacement of 

roof on Building 100 and 

construction of lightning 

protection system

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 810,000 c
Page 40 GAO-14-280R Defense In-Kind Projects

Florida Project title: Engineering 

Design Services 

Purpose: Real Property 

Recapitalization

Description: Design of heating, 

ventilation, and air conditioning 

(HVAC) system for Building 129

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 129,650 c

Florida Project title: Engineering 

Design Services

Purpose: Real Property 

Recapitalization

Description: Design of fire 

protection system for Buildings 

746-751

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 5,965 c

Florida Project title: Engineering 

Design Services

Purpose: Real Property 

Recapitalization

Description: Design of fire 

protection system for Building 

350

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 81,690 c

Florida Project title: Install Lightning 

Protection System

Purpose: Real Property 

Recapitalization

Description: Installation of 

lightning protection system on 

various buildings

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 675,202 c

Florida Project title: Solar Domestic 

Hot Water System

Purpose: Real Property 

Recapitalization 

Description: Solar water heater

to install solar water heating on 

Building 862

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 144,753 c

Florida Project title: Airfield Restriping

Purpose: Real Property 

Recapitalization 

Description: Airfield stripping to 

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 1,172,424 c
Page 41 GAO-14-280R Defense In-Kind Projects

remove rubber and restripe 

runway

Florida Project title: Traffic Signal 

Purpose: Utility and Ground 

Improvements

Description: Mast arm traffic 

signal installed at 8th Avenue

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 194,999 c

Florida Project title: Hurricane 

Upgrade

Purpose: Real Property 

Recapitalization

Description: Hurricane upgrade 

to Building 380

Mid-Bay Bridge 

Easement

Agreement #: 

AFMC-EG-2-09-001

Easement 83,080 c

Florida Project title: Engineering 

Design Services

Purpose: Utility and Ground 

Improvements

Description: Design for 

cathodic protection for water 

tanks

Okaloosa County 

Enhanced-use lease

Enhanceduse leasec

35,700

Army Various 

locations 

within 

continental 

United 

States

Project title: Privatization of 

Army Lodge Group B

d

Purpose: Housing and 

Community

Description: Privatization of 

Army lodging to renovate, 

replace, or construct lodging to

Intercontinental Hotels Group

brand standard and provide 

lodging services at 11 

installations

Department of the Army 

Second Amended and 

Restated Lease and 

Conveyance of 

Improvements for 

Privatization of Army 

Lodging

e

Agreement #: 

DACA65-1-09-47

Private 

funding

334,000,000

Ohio Project title: Joint Systems 

Manufacturing Center Lease 

Improvements

Purpose: Real Property 

Recapitalization

Description: Joint Systems 

Manufacturing Center to 

renovate the leased facilities

Joint Systems 

Manufacturing CenterLima Allen County

Agreement #: 

DACA27-1-12-016

Enhanceduse leasec

270,005
Page 42 GAO-14-280R Defense In-Kind Projects

Kentucky Project title: Fuel Service 

Operations Facility

Purpose: Operation and 

Training

Description: Government 

Owned / Contractor Operated—

Contractor Owned / Contractor 

Operated (GOCO/COCO) Fuel 

services operations and 

maintenance 

Fort Campbell Military 

Installation

Agreement #: 

DACA27-1-11-397

Enhanceduse leasec

Not available

California Project title: Facility 

Construction

Purpose: Operation and 

Training

Description: Real-property 

exchange to build six new 

facilities/projects

Exchange Agreement per 

10 U.S.C. § 18240

Exchangec 66,000,000

Maryland Project title: Warehouse 

Facility

Purpose: Supply

Description: Real-property 

exchange to build new heated 

warehouse for storage of unit 

equipment and renovate 

warehouse to store marine 

equipment used in boat 

operations

Exchange Agreement per 

10 U.S.C. § 18240

Exchange 1,020,000 c

Source: GAO analysis of DOD information. 

a

Purpose categories were assigned by the Office of the Secretary of Defense based on facility classes listed in DOD Instruction 

4165.03 , DOD Real Property Categorization, (Aug. 24, 2012).

b

Estimated values were provided by DOD in then-year dollars.

c

Statutory authorities for these agreements include, among others: 10 U.S.C. § 2667 (leases and enhanced-use leases); 10 U.S.C.

§ 2668 (easements); and 10 U.S.C. § 18240 (real property exchange).

d

The installations include: Fort Belvoir; Fort Bliss; Fort Buchanan; Fort Campbell; Fort Hamilton; Fort Huachuca; Fort Gordon; Fort 

Knox; Fort Leonard Wood; Fort Wainwright; and White Sands Missile Range.

e

Privatization of Army Lodging is included for the purpose of completeness, but, according to DOD officials, this program differs in 

significant ways from the other in-kind projects listed here. While the lodging and housing privatization programs result in private inkind construction or renovation of facilities that, in some cases, continue to be owned by DOD and will be returned to DOD at the 

conclusion of the relevant lease term, according to DOD officials, the purpose of these programs is to construct or renovate facilities 

to rent to servicemembers, not to obtain construction or renovation services of DOD facilities as payment in kind. These officials also 

note that due to the length of the leases in question (a typical lease term is 50–75 years) the facilities in question will not return to 

the department until late in their useful lives, which underscores the fact that these agreements are not intended to be arrangements 

for obtaining construction or renovation as payment in kind.
Page 43 GAO-14-280R Defense In-Kind Projects

Enclosure V: Comments from the Department of Defense

(351796)
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